Next-Best-Action Marketing: Definition & Examples

Instructor: Endya Perry

Endya has taught corporate training courses and led seminars in various business topics. She has a master’s degree in business administration.

What is Next Best Action marketing? What value does this marketing strategy deliver to the consumer? What value does it bring to the organization? In this lesson, you will find answers to these questions and also explore examples of Next Best Action marketing.

The Dilemma

Jessica is a marketing executive at a leading banking institution. In reviewing the most recent financial statements and performance reports, she notices a problem. The company is only half way through the year, yet it has already expended nearly all of its marketing budget. In viewing the performance reporting, she notices that although the company has spent a lot of funds on promotions, it has not received the expected return on that cost. The company's customers were not responding to the strategy the company had in place. Since this is a pattern that Jessica has observed the past two years, she realized that a shift was needed in the overall strategy.

Current Strategy

The current marketing strategy Jessica's company was employing was to highlight a specific product each month. The company would market that product to the entire customer base through a series of tactics - email, direct mail, social media, website banner ads, posters and flyers. This strategy allowed the company to saturate the market with its selected product for the month.

Jessica held a meeting with the marketing leadership team. She reviewed its current strategy and results. Jessica then stated that something must change. Jeremiah, who is the Marketing Strategy Lead, then suggested that they employ a strategy to utilize their marketing budget more efficiently and effectively. He suggested they employ a Next Best Action marketing strategy. The team was eager to learn more about this strategy that could allow the company to reach the point of success they had been striving for.

Next Best Action Marketing Strategy

Jeremiah went on to explain the strategy and value it would bring. He explained that a Next Best Action marketing strategy is a customer-focused strategy that molds the business model to fit the needs of the consumer. It works by gaining an understanding of the consumer and defining a path of actions that would lead to success for that customer. The actions are then presented to the customers along their journey as the next best action they should take based on who they are and where they need to go.

Jeremiah and Jessica realized that this was a change in focus for the organization. The marketing strategy would no longer be focused on saturating the market by promoting a specific product. Rather, the organization will now shift from a product focused organization to a customer focused organization. The strategy would now be focused on providing customers with the next steps they should take to reach their desired destination.

Next Best Action Marketing Strategy Examples

Jeremy's proposal for a Next Best Action Marketing Strategy is not new. Many other companies have implemented such strategies, including, for example, Starbucks. Howard Schultz, the founder and CEO of Starbucks once stated, 'We are not in the coffee business serving people, but in the people business serving coffee.' Starbucks prides itself in providing a personalized experience for each customer, allowing customizations of each drink to fit the specific wants and needs of the customer.

Restaurants also are implementing the Next Best Action Marketing strategy. For example, at a restaurant, the waiter may ask if anyone has any allergies. The waiter then may speak to the customers regarding their selections to understand their preferences and respond by suggesting a specific entrée and dessert they may like. This strategy makes customers feel as though they were the most important patron in the restaurant. Often times, customers end up selecting a dessert to go with their meal. In contrast, other restaurants that do not use a Next Best Action Marketing Strategy may promote a dish of the day which is less catered to their customers' needs.

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